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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated as of November 27,
1997, is between Liberty Group Operating, Inc., a Delaware corporation (the
"Company"), Xxxxxxx X. Xxxxxx ("Executive"), and Liberty Group Publishing, Inc.,
a Delaware corporation ("Parent").
RECITALS
A. The Company will engage in the business of acquiring and publishing
community newspapers.
B. The Company desires to employ Executive as its President and Chief
Executive Officer on the terms set forth in this Agreement.
C. Executive desires to be so employed by Company.
D. Parent controls the Company and will receive substantial benefit
from this Agreement.
AGREEMENTS
In consideration of the foregoing recitals and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
1. Employment.
1.1 Term. Subject to the terms hereof, the Company agrees to
employ Executive as its President and Chief Executive Officer, and Executive
agrees to accept such employment, for the period beginning on January 1, 1998
(the "Commencement Date") and ending on the third anniversary of the
Commencement Date subject to extension as hereinafter provided or earlier
termination pursuant to Section 3 hereof (the "Term"). After the expiration of
the initial three year term, the Term shall be automatically extended or
re-extended on each anniversary of the Commencement Date, commencing on January
1, 2001, for successive one-year periods, subject to earlier termination
pursuant to Section 3 hereof, unless the Company or Executive delivers to the
other party a notice specifying such party's intent not to extend or re-extend
the Term for an additional one-year period, at least 90 days prior to the end of
the then current Term. During the Term, Executive also shall be President and
Chief Executive Officer of Parent and each subsidiary of the Company.
1.2 Duties. During the Term, Executive shall perform such duties
and functions as are customarily performed by the chief executive officer of a
company the size and
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nature of the Company, including the duties and functions consistent with the
positions of President and Chief Executive Officer as are from time to time
assigned to him by the Board of Directors of the Company (the "Board").
1.3 Place of Performance. Executive shall perform his services
hereunder at the principal executive office of the Company which shall be
located in Chicago's central business district or the northern suburbs of
Chicago.
1.4 Time to be Devoted to Employment. Except as otherwise
specified herein and except for illness or injury and reasonable vacation
periods, Executive shall devote his full business time and efforts to his duties
and responsibilities hereunder. During the Term, Executive shall not, without
the prior written consent of the Company, accept other employment or render or
perform other services for compensation, except that Executive may serve on the
board of directors, and committees thereof, of companies other than the Company
and its subsidiaries, provided that such service does not materially interfere
with the performance by Executive of his duties and responsibilities hereunder
and provided that the Board consents to such service, which consent shall not be
unreasonably withheld. In addition, Executive's expenditure of reasonable
amounts of time on personal matters and charitable activities shall not be
deemed a breach of this Agreement, provided the same do not materially interfere
with the performance by Executive of his duties and responsibilities hereunder.
1.5 Vacations. Executive shall be entitled to such paid vacation
time as the Company customarily provides from time to time to its similarly
situated senior executives, to be taken in accordance with the then-current
employment policy of the Company regarding vacation time. Executive shall also
be entitled to all paid holidays given by the Company to its similarly situated
employees.
2. Compensation.
2.1 Base Salary. As compensation for services rendered hereunder,
Executive shall receive an annual salary of not less than (i) $350,000 for the
period beginning on the Commencement Date and ending on the first anniversary
thereof, (ii) $375,000 for the period beginning on the first anniversary of the
Commencement Date and ending on the second anniversary thereof, and (iii)
$400,000 for the period beginning on the second anniversary of the Commencement
Date until the end of the Term, to be paid in accordance with the Company's
customary payroll practices but in no event less frequently than monthly.
Subject to the foregoing, such salary shall be reviewed by the Board no less
frequently than annually. Any increase in salary granted by the Board shall in
no way limit or reduce any other obligation of the Company hereunder.
2.2 Annual Bonuses. (a) In addition to the salary payable pursuant
to Section 2.1, the Company shall pay to Executive an annual bonus, payable as
soon as reasonably practicable after the completion of the audit for each fiscal
year of the Company ("Fiscal Year") ending during the Term, but in any event
within 30 days after completion of such audit, which
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audit shall be completed within 90 days of the end of each such Fiscal Year. The
annual bonus shall be based on realistic performance standards agreeable to the
Company and Executive, including standards based on revenue growth, EBITDA
growth, completion of reasonably acceptable acquisitions and growth of acquired
properties. For each Fiscal Year during the Term (other than the Fiscal Year
ending December 31, 1998), such performance standards shall be approved by the
Board within 30 days after the first day of such Fiscal Year. The performance
standards for the Fiscal Year ending on December 31, 1998 shall be determined
and approved by the Board prior to March 31, 1998.
(b) Subject to attaining the performance standards
established pursuant to Section 2.l(a), (i) the bonus for the Fiscal Year
ending on December 31, 1998 shall equal at least $100,000, (ii) the bonus for
the Fiscal Year ending on December 31, 1999 shall equal at least $125,000 and
(iii) the bonus for the Fiscal Year ending on December 31, 2000 and each Fiscal
Year thereafter during the Term shall equal at least $150,000.
(c) With respect to any Fiscal Year, the annual bonus
determined to be earned for such Fiscal Year shall be deemed to have been earned
on the last day of such Fiscal Year.
2.3 Welfare and Pension Payments. Executive shall be eligible to
participate in the various benefit plans maintained from time to time by the
Company for its employees, including, but not limited to, group life,
disability, dental and health insurance coverage, retirement, deferred
compensation, profit sharing, and other plans in accordance with the terms of
such plans as from time to time in effect and applicable to employees of the
Company. Nothing in this Section 2.3, however, shall require the Company to
maintain any benefit plans or provide any type or level of benefits to its
employees, including Executive.
2.4 Other Benefits. Executive will receive payment for all
business-related organizational or association memberships, in accordance with
the Company's current practices.
2.5 Company Loan. On or prior to January 31, 1998, the Company
shall loan Executive on a full recourse basis the principal amount of $250,000.
Executive intends to use all or a portion of the proceeds of the loan for
investment purposes. The Company shall forgive an equal principal amount of the
loan pro rata on a daily basis during the initial three year Term (i.e., a
principal amount equal to $230 per day will be forgiven). The Company shall
forgive the entire principal amount of the loan simultaneously with the
termination of the Executive's employment by the Company without Cause (as
defined in Section 3.2), the termination of Executive's employment by the
Executive for Good Reason (as defined in Section 3.4), the death of the
Executive, the Disability (as defined in Section 3.5) of the Executive or upon
the consummation of an initial public offering of securities of Parent or the
Company. If the Company terminates Executive's employment for Cause or Executive
terminates his employment without Good Reason, the unforgiven principal amount
of the loan on the date of such termination shall become due and payable by
Executive one year after the date of such termination of employment. The loan
described in this Section 2.5 shall be evidenced by a promissory note setting
forth additional terms and conditions agreed to by the parties.
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2.6 Expenses. The Company shall reimburse Executive promptly for
all reasonable travel and other business expenses incurred by him in connection
with his duties hereunder. The Company shall also pay Executive an automobile
allowance of $500 per month during the Term, payable monthly in arrears. From
the Commencement Date through the consummation of the transactions contemplated
by the Equity Purchase Agreement (as hereinafter defined), the Company will also
reimburse Executive for the additional costs incurred by Executive to maintain
any health insurance benefits that Executive currently receives from his present
employer.
2.7 Withholding. All taxable compensation payable to Executive
pursuant to this Section 2 or otherwise under this Agreement shall be subject to
customary withholding taxes and such other employment taxes as are required
under Federal law or the law of any state or governmental body to be collected
with respect to compensation paid by a corporation to an employee.
3. Termination.
3.1 End of Term or Earlier Death. Unless Executive's employment
has terminated sooner, such employment shall terminate at the end of the Term
or, if Executive dies prior thereto, on the date of Executive's death.
3.2 Termination by the Company for Cause. The Company may
terminate Executive's employment hereunder for Cause. For purposes of this
Agreement, "Cause" shall mean Executive's conviction of, guilty plea concerning
or confession of, fraud, theft, embezzlement or any felony. In order to
terminate Executive's employment hereunder for Cause, the Company must notify
Executive of such decision in writing, specifying the Cause and the Date of
Termination (as hereinafter defined).
3.3 Termination by the Company without Cause. The Company may
terminate Executive's employment hereunder at any time without Cause upon notice
to Executive specifying the Date of Termination.
3.4 Termination by Executive for Good Reason. Executive shall be
entitled to terminate his employment hereunder for Good Reason. For purposes of
this Agreement, "Good Reason" shall mean the occurrence of any of the following
circumstances without the prior written consent of Executive:
(a) the relocation of the Company's principal executive
office anywhere outside Chicago's central business district or the
northern suburbs of Chicago, unless Executive agrees to such relocation,
in which case, the relocation of the Company's principal executive office
to an unagreed location, or Executive being required to be based anywhere
other than the Company's principal executive office;
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(b) the requirement that Executive report to any officer,
consultant or committee or a Board that is not controlled, directly or
indirectly, by Xxxxxxx Xxxxx and Partners, L.P. ("LGP"; and such Board
being referred to as the "LGP Board"), other than a formal committee of
the LGP Board, it being the intent of the parties that Executive shall
never be required to report to anyone other than the LGP Board or a formal
committee thereof;
(c) a redelegation of any material duties of Executive to
other officers, employees, consultants or committees;
(d) the assignment of duties to Executive which are
inconsistent with those of a chief executive officer or president of a
company the size and nature of the Company;
(e) a material breach of the Company's or Parent's
obligations under this Agreement; or
(f) a Change of Control (as hereinafter defined).
For purposes of this Agreement, a "Change of Control" shall be deemed to have
occurred if at any time after the date hereof:
(A) the Company sells or otherwise disposes of all or
substantially all of its assets, except for a sale or disposition to
Executive or an entity controlled, directly or indirectly, by Executive;
or
(B) Green (as hereinafter defined) no longer owns 50 % or
more of the voting shares of stock of Parent or Parent no longer owns,
directly or indirectly, at least 95% of the voting securities of the
Company, other than as a result of a public offering of the securities of
Parent registered under the Securities Act of 1933, as amended, or an
acquisition by Executive or an entity controlled, directly or indirectly,
by Executive.
In order to terminate his employment hereunder for Good Reason, Executive shall
give the Company written notice thereof, specifying such Good Reason and the
Date of Termination, which shall be not less than ten days from the date of such
notice, the Company shall have such ten days to eliminate the basis of such Good
Reason to the reasonable satisfaction of Executive.
3.5 Termination for Disability. The Company may terminate
Executive's employment for Disability. For purposes of this Agreement,
"Disability" shall mean Executive's inability, due to physical or mental illness
or accident or injury, to perform his duties hereunder on a full-time basis for
90 or more business days within five consecutive months and thereafter Executive
shall not (a) within ten days after a written notice of intention to terminate
is received by Executive, have returned to the full-time performance of his
duties and (b) have continued during the following two months to perform his
duties full-time without absences due to physical
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or mental disability aggregating more than ten business days, If the Company
elects to terminate Executive's employment for Disability, it shall give written
notice thereof to Executive specifying the Date of Termination.
3.6 Notice and Date of Termination. Any termination by the Company
or Executive shall be communicated by written Notice of Termination to the other
party hereto in accordance with Section 7.4. As used herein, the term "Date of
Termination" shall mean the date specified in the Notice of Termination (which,
except for termination for Cause or termination for Good Reason, shall be not
less than 30 days from the date such Notice of Termination is given).
4. Payments Upon or After Termination.
4.1 Accrued Compensation. Upon termination of Executive's
employment with the Company for any reason, Executive shall be entitled to
receive the compensation earned and unpaid as of the Date of Termination. The
Company shall continue to provide Executive with all profit sharing, pension,
life, disability, accident, health insurance, and other employee benefit and
fringe benefit plans and programs through the Date of Termination in accordance
with the terms and provisions of such plans and programs in effect at the time
of that Notice of Termination is given. Except as otherwise provided in this
Section 4, the Executive shall not be entitled to any portion of his annual
bonus which has not been earned as of the Date of Termination.
4.2 Termination for Cause. Other than the Company's obligations
under Section 4. 1, if Executive's employment with the Company is terminated by
the Company for Cause, the Company shall have no further obligations to
Executive under this Agreement.
4.3 Termination by Company Without Cause or Termination by
Executive for Good Reason. In addition to the Company's obligations under
Section 4. 1, if (a) Executive's employment is terminated by the Company without
Cause or (b) Executive's employment is terminated by Executive for Good Reason
in accordance with the provisions of Section 3.4, the Company shall pay
Executive, within 30 days of the Date of Termination, an amount equal to the
greater of (i) the aggregate amount of the base salary to be paid under this
Agreement for the balance of the Term and (ii) one year's base salary at the
Executive's then current annual salary. In addition, the Company shall pay to
Executive the portion of his annual bonus (his "Pro Rata Bonus") equal to the
amount of the bonus he would have earned had he remained employed through the
last day of the Fiscal Year in which such termination occurs (based on actual
performance results for such Fiscal Year) multiplied by a fraction, the
numerator of which is the number of days the Executive was employed by the
Company during such Fiscal Year and the denominator of which is 365. His Pro
Rata Bonus shall be paid after the end of the Fiscal Year in which such
termination occurs in the same manner as if Executive had been employed for the
full Fiscal Year.
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4.4 Termination for Disability or Death. During any period that
Executive fails to perform his duties hereunder as a result of incapacity due to
physical or mental illness or accident or injury, Executive shall continue to
receive his full salary at the annual rate in effect at the commencement of such
period and all other benefits and all other compensation pursuant to this
Agreement until his employment is terminated pursuant to Section 3.5. In
addition, in the event Executive's employment is terminated as a result of
Disability or death, the Company shall pay to Executive his Pro Rata Bonus,
which shall be paid after the end of the Fiscal Year in which such termination
occurs in the same manner as if Executive had been employed for the full Fiscal
Year.
4.5 Other Termination by Executive. If Executive shall terminate
his employment hereunder for any reason other than Good Reason, other than the
Company's obligations under Section 4.1, the Company shall have no further
obligations to Executive under this Agreement.
4.6 Disclaimer of Mitigation Duty. Executive shall not be required
to mitigate the amount of any payment provided for or referred to in this
Section 4 by seeking other employment or otherwise, nor shall the amount of any
payment or benefit provided for or referred to in this Section 4 be reduced by
any compensation earned by Executive as a result of other employment, by
retirement benefits, by offset against any amount claimed to be owed to Company
or otherwise.
4.7 Other Benefits. In addition to all other amounts payable to
Executive under this Section 4, Executive shall be entitled to receive all
benefits payable to Executive under any plans or agreements relating to
retirement or other benefits in accordance with the terms and provisions
thereof.
4.8 Golden Parachute Provision. In the event that in the opinion
of tax counsel selected and compensated by Executive ("Executive's Tax
Counsel"), a payment or benefit received or to be received by Executive
following his termination (whether pursuant to the terms of this Agreement or
any other plan, arrangement or agreement with the Company or any person
affiliated with the Company) (collectively, with the payments provided for in
the foregoing provisions of this Section 4, the "Post Termination Payments")
would be subject to excise tax (in whole or part) as a result of section 28OG of
the Code, and (b) as a result of such excise tax, the net amount of Post
Termination Payments retained by Executive (taking into account such excise tax)
would be less than the net amount of Post Termination Payments retained by
Executive if the Post Termination Payments were reduced or eliminated as
described in this Section 4.8, then the Post Termination Payments shall be
reduced or eliminated until no portion of the Post Termination Payments is
subject to excise tax, or the Post Termination Payments are reduced to zero. For
purposes of this limitation (i) no portion of the Post Termination Payments the
receipt or enjoyment of which Executive shall have waived in writing prior to
the date of payment following termination of the Post Termination Payments shall
be taken into account, (ii) no portion of the Post Termination Payments shall be
taken into account which in the opinion of Executive's Tax Counsel does not
constitute a "parachute payment" within the meaning of
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section 280G(b)(2) of the Code, (iii) the Post Termination Payments shall be
reduced only to the extent necessary so that the Post Termination Payments
(other than those referred to in clauses (i) and (ii)) in their entirety
constitute reasonable compensation for services actually rendered within the
meaning of section 280G(b)(4) of the Code or are otherwise not subject to excise
tax, in the opinion of Executive's Tax Counsel, and (iv) the value of any
non-cash benefit and all deferred payments and benefits included in the Post
Termination Payments shall be determined by the mutual agreement of the Company
and Executive in accordance with the principles of sections 280G(d)(3) and (4)
of the Code.
5. Equity.
5.1 Issuance of Equity. (a) As promptly as possible (but in any
event within ten business days after the consummation of the transactions
contemplated by the Equity Purchase Agreement), Parent shall issue to Executive
2% of the fully-diluted equity of Parent (including the Purchased Shares (as
defined below)) (the "Bonus Shares"), and shall deliver to Executive a
certificate representing the Bonus Shares registered in the name of Executive.
Executive at his option may purchase up to 2% of the fully-diluted equity of
Parent (including the Bonus Shares) (the "Purchased Shares") for the price,
terms, and conditions such equity is purchased by GE Equity Investors II, L.P.
("Green"), and Parent shall deliver to Executive a certificate representing the
Purchased Shares registered in the name of Executive. At Executive's request,
the Company shall loan (the "Equity Loan") Executive up to 50% of the purchase
price of the Purchased Shares specified by Executive. The Equity Loan shall bear
interest at a rate equal to applicable federal rate for loans of the same
maturity as of the date on which the Equity Loan is made and the outstanding
principal balance of the Equity Loan, together with all interest accrued
thereon, shall be due and payable in full on the earlier of (i) a Change of
Control or (ii) January 1, 2001. The Executive may at any time make full or
partial prepayments of principal amounts due on the Equity Loan without penalty
or premium. The Bonus Shares and the Purchased Shares are collectively referred
to herein as the "Executive Shares". Upon issuance, the Executive Shares shall
be validly issued, fully paid and nonassessable. The Company agrees that it
shall pay when due and payable any and all Federal and state taxes (including,
but not limited to, income taxes) which may be payable by the Company, Parent or
Executive in respect of the issuance and receipt of the Executive Shares or the
certificates therefor. The amount of such payments shall be "grossed-up" by an
amount sufficient to pay any Federal or state income taxes payable by Executive
as a result of the inclusion of such payments (including, but not limited to,
the amount of the "gross-up") in Executive's compensation for Federal and state
income tax purposes.
(b) In the event that prior to the expiration of the initial
three year term, Executive's employment with the Company is terminated for any
reason, Parent shall have the option to repurchase, at the prices described in
(c) below (the "Repurchase Price"), the number and type of Executive Shares
determined in accordance with the following:
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(i) with respect to fifty percent (50%) of the Bonus
Shares and fifty percent (50%) of the Purchased Shares,
Parent's repurchase rights shall be terminated pro rata on a
daily basis over the initial three year Term; and
(ii) with respect to fifty percent (50%) of the Bonus
Shares and fifty percent (50%) of the Purchased Shares,
Parent's repurchase rights shall be terminated annually as to
one-third of such Bonus Shares and Purchased Shares,
respectively, based on achieving the performance standards
established in accordance with Section 2.2 (it being the
intention of the parties that such termination of repurchase
rights shall be determined on an incremental basis (rather
than on an "all or nothing" basis so that even if such
performance standards are not fully achieved in any fiscal
year an agreed-upon percentage of the repurchase rights with
respect to the applicable Bonus Shares and Purchased Shares
shall be terminated upon attaining agreed-upon percentages of
such performance standards) and cumulative from year-to-year
(so that if performance standards are exceeded in any fiscal
year by agreed-upon percentages, an agreed-upon percentage of
the repurchase rights that did not terminate in a prior fiscal
year during the Term may terminate in the fiscal year in which
the performance standards are exceeded).
If the Executive delivers to Parent a certificate representing more than the
Executive Shares to be surrendered pursuant to this paragraph, Parent shall
deliver to Executive a certificate representing the Executive Shares not
surrendered for cancellation as soon as possible after such surrender (but in
any event within three business days).
(c) If Executive's employment is terminated (i) by the
Company without Cause in accordance with the provisions of Section 3.3, (ii) by
Executive for Good Reason in accordance with the provisions of Section 3.4 or
(iii) because of death or Disability of the Executive in accordance with the
provisions of Section 3.1 or 3.5, respectively, the Repurchase Price shall be
the fair market value of the equity being repurchased (without discount for lack
of liquidity or minority interest) as determined by an appraiser (whose fees and
expenses shall be borne by Parent) mutually agreeable to Parent and Executive
(or, if applicable, Executive's personal or legal representative, executor or
administrator). In the event that Parent repurchases any securities from
Executive for a Repurchase Price calculated pursuant to the preceding sentence
and within one year of the consummation of such repurchase a Change of Control
or a public offering of securities of Parent or the Company is consummated for a
consideration per share that exceeds the amount received by Executive
("Adjustment Event"), Executive shall receive from Parent within 10 days of the
consummation of such Adjustment Event cash in an amount equal to the amount that
Executive would have received following such Adjustment Event had the repurchase
rights not been previously exercised minus the amount Executive previously
received in connection with the repurchase. If the Executive's employment is
terminated. (i) by the Company for Cause or (ii) by the Executive for any reason
other than Good Reason, the Repurchase Price shall be the price paid by
Executive for the Executive Shares.
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(d) The provisions of paragraphs (b) and (c) shall cease to
be effective immediately upon the consummation of an initial public offering of
securities of Parent or the Company.
(e) The number of shares referred to in paragraphs (a) and
(b) will be proportionately adjusted in the event the Common Stock of Parent is
combined into a lesser number or subdivided into a greater number.
(f) Parent must exercise its option under Section 5(b), if
at all, by written notice to Executive within 30 days after Executive's
employment with the Company is terminated. To the extent not exercised within
the 30 day period, Parent's option shall lapse. The repurchase option, if
exercised by Parent, must be exercised pro rata between Bonus Shares and
Purchased Shares (i.e., one-half of any shares repurchased must be Bonus Shares
and one half of any shares repurchased must be Purchased Shares).
5.2 Stockholders Agreement. Executive, Parent and Green shall
enter into a mutually agreeable Stockholders Agreement (the "Stockholders
Agreement") within 30 days after the date hereof pursuant to which (i) Parent
grants Executive Parent-paid piggyback registration rights with respect to the
Executive Shares on a pro rata basis with Green, (ii) Parent grants Executive
the right to purchase his pro rata share of issuances of equity securities of
Parent issued after the date hereof, (iii) Green grants tag-along rights to
Executive in connection with the sale by Green of any equity of Parent and (iv)
Parent agrees to take, and cause the Company to take, all actions necessary to
carry out the terms of this Agreement.
6. Board of Directors. (a) Parent agrees that at all times during the
Term Executive shall be a member of the Board of Directors of Parent ("Parent
Board") and the Board of Directors of each subsidiary of Parent (a "Subsidiary
Board").
(b) In the event that at any time, or from time to time,
during the Term the Parent Board or any Subsidiary Board establishes an
executive or similar committee of the Parent Board or a Subsidiary Board charged
with executive functions or responsibilities, Parent agrees that Executive will
be a member of such committee.
7. Miscellaneous.
7.1 Successors and Assigns: Binding Agreement. (a) The Company
will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to
perform this Agreement if no such succession had taken place.
(b) This Agreement and all rights of Executive hereunder
shall inure to the benefit of and be enforceable by Executive's personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If Executive shall die
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while any amounts remain unpaid hereunder, including any amounts which would be
payable to him hereunder if he had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to Executive's spouse or if Executive does not have a living spouse at
such time, to Executive's estate.
(c) This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective heirs, personal
representatives, successors and assigns; provided, however, that the duties of
Executive hereunder are personal to Executive and may not be delegated by him.
7.2 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois concerning
contracts made and to be wholly-performed in such state, without regard to
conflicts of law principles. Any suit, action or proceeding brought concerning
or relating to this Agreement or the rights and obligations hereunder, whether
in contract, tort, equity or otherwise, shall be brought exclusively in the
state or federal courts sitting in Xxxx County, Illinois (regardless of whether
any tribunal in any other jurisdiction also has jurisdiction over the subject
matter hereof or the parties hereto). Each party hereto waives any claim or
defense that such forum is not convenient or proper. Each party hereto agrees
that any such Xxxx County, Illinois court shall have in personam jurisdiction
over it, consents to service of process by notice delivered in accordance with
the terms of this Agreement or in any other manner authorized by Illinois law,
and agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner specified by law.
7.3 Waivers. The waiver by either party hereto of any right
hereunder or of any failure to perform or breach by the other party hereto shall
not be deemed a waiver of any other right hereunder or of any other failure or
breach by the other party hereto, whether of the same or a similar nature or
otherwise. No waiver shall be deemed to have occurred unless set forth in a
writing executed by or on behalf of the waiving party. No such written waiver
shall be deemed a continuing waiver unless specifically stated therein, and each
such waiver shall operate only as to the specific term or condition waived and
shall not constitute a waiver of such term or condition for the future or as to
any act other than that specifically waived.
7.4 Notices. All notices and communications that are required or
permitted to be given hereunder shall be in writing and shall be deemed to have
been duly given when delivered personally, upon mailing by registered or
certified mail, postage prepaid, return receipt requested, or upon delivery to
an overnight courier as follows:
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If to Parent or the Company, to:
Liberty Group Publishing, Inc,
______________________________
______________________________
Attention: ___________________
with a copy to:
Xxxxx Xxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: ___________________
If to Executive, to:
Xxxxxxx X. Xxxxxx
0000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
with a copy to:
Xxxxxx Xxxxxx & Xxxxx
000 Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
or to such other address as may be specified in a notice given by one party to
the other party hereunder.
7.5 Severability. If for any reason any term or provision of this
Agreement is held to be invalid or unenforceable, all other valid terms and
provisions hereof shall remain in full force and effect, and all of the terms
and provisions of this Agreement shall be deemed to be severable in nature.
7.6 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute but one and the same instrument.
7.7 Legal Fees and Expenses. (a) The Company shall pay, or
reimburse Executive for, the legal fees and expenses of counsel to Executive in
connection with the preparation, negotiation, execution and delivery of this
Agreement.
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(b) In the event Parent or the Company has failed to comply
with any of its obligations under this Agreement, or in the event that the
Company, Parent or any other person takes any action to declare this Agreement
void or unenforceable, in whole or in part, or institutes any litigation
designed to deny, or to recover from, Executive any benefits intended to be
provided to Executive hereunder (a "Covered Claim"), the Company shall pay, or
reimburse Executive for, all costs and expenses (including reasonable attorneys'
fees and court costs) incurred by the Executive in connection with the
initiation or defense of any litigation, arbitration or other legal action,
whether by or against the Company or any director, officer, stockholder or other
person affiliated with the Company, in any jurisdiction (collectively,
"Actions'), with respect to a Covered Claim unless and until it shall be
ultimately determined that neither the Company nor Parent has failed to comply
with any of its obligations under this Agreement. The Company shall advance to,
or reimburse, Executive within 30 days after each written request therefor any
and all attorneys' and related fees and expenses incurred or to be incurred by
Executive in connection with Actions with respect to Covered Claims at any time
after the earlier of (i) the disposition of such Covered Claim or (ii) such time
as Executive has paid $100,000 of fees and expenses in the aggregate with
respect to such Covered Claim. Prior to the disposition of a Covered Claim, the
Company shall advance to, or reimburse, Executive only for fees and expenses in
excess of the first $100,000 of fees and expenses which is paid by Executive.
Unless Executive becomes obligated to pay or reimburse the Company for costs and
expenses as provided in the following sentence, upon the disposition of a
Covered Claim the Company shall reimburse Executive promptly for the first
$100,000 of fees and expenses paid by Executive with respect to such Covered
Claim. Executive agrees that he will reimburse the Company for all attorneys'
and related fees and expenses received by Executive from the Company under the
provisions of this Section 7.7 and pay or reimburse the Company or Parent for
all costs and expenses (including reasonable attorneys' fees and court costs)
incurred by the Company or Parent in connection with Actions with respect to a
Covered Claim in the event and only to the extent that it shall be ultimately
determined that the Company has not failed to comply with any of its obligations
under this Agreement.
7.8 Indemnification. The Company shall indemnify and hold harmless
Executive from any claim asserted against him as an employee, officer or
director of the Company or any of its subsidiaries, or as director, officer or
partner of any other enterprise if Executive serves or served in such capacity
at the request of the Company, to the fullest extent permitted. by applicable
state laws. Expenses incurred by Executive in connection with any such claim
shall be paid by the Company in advance upon the written request of Executive.
Executive shall reimburse the Company for such expenses in the event and only to
the extent that it shall be ultimately determined that Executive is not entitled
under applicable state law to be indemnified for such expenses.
7.9 Amendment. This Agreement may be amended or canceled by mutual
agreement of the parties in writing without the consent of any other person.
7.10 Entire Agreement. This Agreement, together with the
agreements executed in connection herewith, constitutes the entire agreement
between the parties, and supersedes all
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prior oral or Written understandings between the parties, relating to
Executive's employment, other than the provisions set forth under the heading
"Employment Protections" in that certain Term Sheet delivered by Executive to
Xxxxxxx Xxxxx and Partners, L.P. (the "Term Sheet"), which provisions shall
survive the execution of this Agreement, until the consummation of the
transactions contemplated by that certain Equity Purchase Agreement to which the
Company is a party, dated as of November _, 1997 (the "Equity Purchase
Agreement"), and the termination of this Agreement pursuant to Section 7.12.
7.11 No Attachment. Except as required by law, no right to receive
payments under this Agreement shall be subject to anticipation, commutation,
alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation or
to execution, attachment, levy, or similar process or assignment by operation of
law, and any attempt, voluntary or involuntary, to effect any such action shall
be null, void and of no effect.
7.12 Termination. In the event the transactions contemplated by the
Equity Purchase Agreement are not consummated prior to February 28, 1998, this
Agreement shall terminate, except that the Company's obligation to pay Executive
salary pursuant to Section 2.1 for the period commencing on the Commencement
Date and ending on the date of termination of this Agreement and to reimburse
Executive for expenses pursuant to Sections 2.6 and 7.7 shall survive the
termination of this Agreement.
(Remainder of page intentionally left blank.
Signature page follows.]
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The parties hereto have executed this Agreement on the date and year first
above written.
LIBERTY GROUP OPERATING, INC.
By: /s/ Xxxxxxx X. Annick
--------------------------------------
Title: President
-----------------------------------
LIBERTY GROUP PUBLISHING, INC.
By: /s/ Xxxxxxx X. Annick
--------------------------------------
Title: President
-----------------------------------
/s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
XXXXXXX X. XXXXXX
The undersigned, XXXXXXX XXXXX & PARTNERS, L.P. ("Green"), agrees (i) to
cause GE Equity Investors II, L.P. to execute the Stockholders Agreement (as
defined in the Employment Agreement set forth above), (ii) to advance to the
Company funds to enable the Company to satisfy its obligations under this
Agreement to be performed prior to the consummation of the transactions
contemplated by the Equity Purchase Agreement and (iii) to honor the provisions
set forth under the heading "Employment Protections" in the Term Sheet (as
defined in the Employment Agreement).
XXXXXXX XXXXX & PARTNERS, L.P.
By: L & P Management, Inc.
its General Partner
By: /s/ Xxxxxxx X. Annick
--------------------------------------
Title: Vice President
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